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What Big-Box Retailers Can Teach Government About Disaster Recovery

Companies have become masters of disaster as they’ve endured every type of emergency and learned lessons along the way.

[Photo: After being destroyed by a tornado in April, the Lowe’s in Sanford, N.C., was rebuilt and reopened on Sept. 8. Photo courtesy of Lowe's]

With hundreds of locations nationally and globally, big-box companies like Lowe’s and Target have become masters of disaster recovery and business continuity. With their geographic vastness, these companies must be ready for natural and man-made disasters and have an action plan for everything from rebuilding a store to supporting affected employees.

These companies excel at disaster recovery because they’ve endured it before. They’ve learned lessons along the way (think Hurricane Katrina) and adapted plans. While there are many distinctions between public and private sectors, they’re more alike than different when it comes to business continuity and disaster recovery.

Just as governments are vital to recovery, businesses are possibly more critical to rebuilding a disaster-stricken community. Thus it should be no surprise that some leading examples of disaster recovery are in the private sector — and state and local governments can look to big-box chains for best practices.

Dan Stoneking, director of FEMA’s Private Sector Division, said there are aspects of disaster recovery that both sectors can benefit from, including having an emergency operations center (EOC) — which oversees all aspects of emergency response and public-private partnerships — to inform decision-making and provide dedicated assets. “We all benefit from planning for the worst and hoping for the best,” Stoneking said.

Behind the Curtain

Many in the public and private sectors have created EOCs that function as command centers during emergencies. But Target took this a step further with its Corporate Command Center (C3). Located in Minneapolis, the C3 has operated 24/7 since opening about five years ago, according to Mike Rackley, Target’s director of global security services.

“It helps us have strong surveillance of the environment and what is happening that could have any potential disruption to business,” Rackley said. “Whether it is a weather event, man-made event — whatever it might be — and gives us the ability to have firsthand knowledge and quick awareness of the occurrence.”

In this tight fiscal environment, governments may not have the resources to staff an EOC 24/7, but real-time information can still be obtained. The National Weather Service, for instance, offers e-mail and text alerts using GovDelivery Inc., a company that provides communication services for government. And the Weather Channel has a free desktop tool that provides real-time severe weather alerts and local information.

Bo Calilung

Photo: Lowe's Command Center / Courtesy of Lowe's

Lowe’s relies on its Command Center in Mooresville, N.C., for to-the-minute situational awareness before and during a disaster — most recently for Hurricane Irene, which affected more than 100 stores. J.D. Densmore, manager of the Command Center, said Lowe’s activated the center before Irene’s landfall and brought in representatives covering a wide variety of functions like HR, public relations and community relations; as well as a repair, building and construction specialist to advise on moving products to support the stores impacted by the hurricane.

Many governments and companies have their EOCs set up similarly and house key people in different functions. But it’s also important that government and industry share how their command centers work. In November 2010, FEMA began allowing private-sector representatives to observe its operations center, with an executive from Target spending 90 days there.

“States and localities can do the same, and I’d highly encourage it,” Stoneking said. “It’s amazing what you learn when you invite somebody into your backyard — it becomes personal. Only after your guests have the visibility of how you do business can they offer the most useful feedback on how to build a more robust environment.”

Another important aspect is giving private-sector workers a role in a government operations center. Businesses are vital to a community’s recovery post-disaster — they provide supplies and products that residents and governments need to restore normalcy. For example, during emergencies, the nonprofit California Resiliency Alliance serves as a liaison between government and its member business organizations. The alliance staffs representatives in the state’s EOC in order to keep businesses updated and relay information requests.

The symbiotic relationship between government and industry requires an open exchange of information. “We as the private sector rely on the government to ensure that roads are open, water is flowing and the power is on,” Rackley said. “If those conditions are met, then we can reopen for business and ensure that commerce is back open and running.”

Working Together Is Key

The private sector also provides best practices for supply chain management — whether delivering health supplies like face masks or setting up food distribution stations — government can learn from companies how to do so efficiently.

Lowe’s supply chain doesn’t change much between normal and emergency operations. “The way that our supply chain is structured allows us to be nimble when we’re responding to an emergency,” Densmore said. The company’s distribution centers can push out more products to accommodate emergencies. On an average day, Densmore said each store receives two truckloads of products, but the week after Hurricane Irene, more than 1,000 truckloads were distributed on the East Coast. “We’re doing that through the existing network,” he said. “There’s no change in how we do it; it’s just ramping that volume up to make sure we can take care of customer needs.”

What can governments learn from this? Pre-position supplies in locations that are predicted to be impacted by a natural disaster, and for no-notice events such as terrorist attacks, keep emergency supplies stocked in different locations. For example, if government buildings are spread across a city (or state), divide supplies among the buildings based on how many residents live near them. This is similar to Target’s strategy. Rackley said for hurricanes, the company pre-positions emergency supplies in its distribution centers so they can be quickly moved to the needed locations.

There are many aspects to preparedness that government and industry do separately, but collaborating is important. Establishing public-private partnerships in advance can be key, especially at the state level. Stoneking said the best government programs follow “PADRES”: have a Publicly Accessible representative; a Dedicated full-time employee; provide a Resource like an office or website; the representative must be Engaged; and funding must be allocated to Sustain the program.

The private sector echoes this sentiment. Densmore encourages local governments to establish a private-sector liaison, and he said Florida has done a good job of this at the county level. Each county EOC has an industry liaison who works with the business community on preparedness and execution during an emergency.

Rackley said memorandums of understanding can be helpful at the state level, adding that it’s not an agreement about selling merchandise, but about sharing the responsibility to recover. This lets stores become operational quickly, providing a place for people to get supplies and getting employees back to work.

Although the public and private sectors differ, when it comes to supporting communities and recovering from a disaster, they have the same goal — return a community to normal as quickly as possible to support residents and the local economy.

Sweet Recovery

Since 1955, Waffle House has served truck drivers and residents at more than 1,500 restaurants that provide 24/7 service. The company also has become known in the emergency management community as a role model for disaster recovery and business continuity. FEMA Administrator Craig Fugate has openly talked about his “Waffle House test” — if one of the company’s restaurants is closed after a disaster, the situation is still bad. Here are five ways state and local governments can recover Waffle House-style:

1. Operate on a limited menu. Bring back public services in their order of importance to supporting a community post-disaster.

2. Stay up-to-date with email alerts about severe weather.

3. Provide employees with key fobs that contain the phone numbers of local managers and important contacts.

4. Outfit a recreational vehicle with satellite equipment so backup communications can move to a safe location.

5. Temporarily staff with workers from outside the affected area so local employees can focus on personal recovery.